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India Smartphones Take on Chinese Firms
Economy, Sci & Tech

India Smartphones Take on Chinese Firms

The Intex brand does not have much name recognition beyond India’s borders. In fact, the Indian smartphone maker has even struggled to compete in its home market — pushed aside by global players like Samsung and Chinese tech giants.
Yet, the Intex factory in Noida, an hour outside of Delhi, offers a glimpse into the playbook of Indian companies and their aggressive push to “Make in India,” an initiative, CNBC reported.
The facility located in this industrial neighborhood is just two years old. And with 750 people working directly on the assembly line, the operation pales in comparison to Chinese firms like Huawei.
The factory churns out 15,000 smartphones and 10,000 feature phones a day. But Intex CFO Rajeev Jain has his eye on another figure: The 70-30 ratio of imported-to-domestic components.
“We are focused on reducing the imported content,” Jain said. “By 2019, most of the components are going to be domestic only. This percentage should definitely reverse.”
Jain says that reversal is key to Intex lowering the cost of its handsets — and ultimately competing with foreign players at home. While the company has five factories throughout India, just one is dedicated to developing components. It’s in the process of building a sixth plant, to reduce its imports from 70 to 20 percent in the next two years.
That effort to sell cheaper, locally produced smartphones has taken on increased importance since November last year, when the government pulled more than 80% of banknotes from circulation in an effort to tackle black money. That forced millions of unbanked users onto smartphones to utilize digital payment platforms like Paytm.
Yet internet penetration remains just over 30% in a country with a population of over 1.3 billion.
Demonetization has accelerated that digital literacy, and the government has implemented a 10% import duty to help local companies like Intex get ahead.
Jain admits domestic companies still lag far behind their Chinese competitors who have spent years building out their own ecosystems in India. Not one local player cracked the top 5 in sales, in the first quarter.

 

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